Millennial professionals have a reputation for renting in the city rather than buying their own homes. This might be the case for many millennials, but certainly not all. Half the current home buying market is under 36-years-old. So what do we know about these younger buyers? Here are some of the top takeaways from Zillow’s newest report on Consumer Housing Trends.
They Are Willing to Rent.
Millennials do not appear to consider buying or renting an either/or choice. Instead, two-thirds of millennial buyers consider renting at the same time as they are shopping for a home, and one in three seriously consider it.
This might be because of the steep competition among buyers in the current market. In a seller’s market, it can be hard to compete with couples who can afford to make high bids and large down payments. Since almost 60% of renters make less than $50,000 a year (compared to home buyers’ average $87,500), the upfront cost of homeownership might be too daunting.
Millennials Live in the Suburbs.
47% of millennial homeowners live in the suburbs, which might come as a surprise to anyone regularly reading about this age group’s love for cities.
But millennials, like other homeowners before them, are willing to trade the access provided by a city for the space, amenities, and lower cost of the suburbs.
Interestingly, Zillow research also reveals that today’s “starter” homes are almost as large as “move-up” homes and cost only 18% less. This could well be connected to the millennials’ housing preferences. Since most wait longer to buy their first home, they are looking to buy enough space for a family, not just for a couple.